Market Feasibility Analysis

A Market
Feasibility Analysis determines
the likelihood that a proposed land use or development will fulfill the
objectives of a particular investor or community. For example, a feasibility
study for a proposed housing subdivision should:

Estimate
the demand for housing units in the area;

Estimate
the absorption rate (expected annual sales or new occupancy of a particular
type of land use) for the project;

Discuss
legal and other considerations;

Forecast
Cash Flows; and

Approximate
investment returns likely to be produced.

Though
it is helpful to have development sites in mind to complete a market feasibility
study, it is not necessary. A market
study can help a community understand its economic strengths and
weaknesses. These studies analyze
spending patterns, incomes, leakage (sales revenues leaving the community) and
service gaps.

Cities
and Counties often see either a gap in services/demand for services or see an
opportunity within their community, but need to know whether or not the
gap/demand is enough to make a project feasible.

Studies can be done for specific uses like
housing, lodging/conference, retail, office/commercial, parking, recreation
opportunities, special events, community uses (like museums, theatres, and
music venues) as well as for neighborhoods, focus areas or districts such as a
downtown feasibility study.

The tools in this toolbox focus on various types
of feasibility studies and how these studies inform the development process.

A joint initiative of San Joaquin Valley Councils of Governments representing each of the region's eight counties, the San Joaquin Valley Air Pollution Control District, the Great Valley Center, and the Fresno State Community and Regional Planning Center